VOL. 128 | NO. 164 | Thursday, August 22, 2013
NYSE Warns Verso of Possible Stock Delisting
By Jennifer Johnson Backer
Verso Paper Corp. said Tuesday, Aug. 20, it has been warned by the New York Stock Exchange that its stock could be delisted.
The Memphis-based company’s shares have failed to meet the NYSE’s listing standard requiring the average closing price of Verso’s common stock to be at least $1 over a consecutive 30 trading-day period.
As of Aug. 14, the average closing price of Verso’s common stock was $0.97 per share. The company has until Feb. 14 to bring the average closing share price of its common stock up to the Stock Exchange’s standard.
In a prepared release, Verso officials said they have notified the NYSE that they intend to “cure the share price deficiency.”
Separately, the NYSE also has already warned Verso it could be delisted due to the paper maker’s failure to satisfy the NYSE’s continued listing standard that requires Verso to have an average market capitalization of at least $75 million over a consecutive 30-day trading period.
Verso has appealed the NYSE’s determination. The NYSE’s board of directors is expected to hear that appeal on Sept. 10.
Verso, like other paper makers, has been hard-hit as magazines and other print publishers have turned to digital content, purchasing less of the glossy paper that Verso specializes in making. Some of Verso’s largest customers include publishing giants such as Conde Nast Publications, Hearst Enterprises and Time Inc.
Verso on Aug. 8 reported second-quarter revenue declined 9.6 percent to $330.4 million, compared with $365.3 million a year earlier. Company officials said the sales slump was driven by the closure of a mill in Sartell, Minn., after an explosion occurred in May 2012. The mill was permanently closed in August 2012.
Despite the paper industry’s dwindling strength, it’s still a formidable economic power. Based on 2012 sales, the size of the global coated paper industry is about $44 billion, Verso said in its most recent annual Securities and Exchange Commission filing.
The struggling coated paper company traces its roots to Memphis-based International Paper Co.
In August 2006, New York-based private equity firm Apollo Global Management LLC purchased International Paper Co.’s coated paper unit for $1.4 billion and renamed it Verso. By May 2008, Verso had completed an initial public offering of stock.
While Verso’s corporate headquarters is in Memphis, its three paper mills are located in Maine and Michigan.
As of Dec. 31, Verso employed about 2,200 employees globally, regulatory filings show.